Assessing Targeted Macroprudential Financial Regulation: The Case of the 2006 Commercial Real Estate Guidance for Banks
61 Pages Posted: 26 Jul 2014
Date Written: June 14, 2016
Abstract
In January 2006, federal regulators issued guidance requiring banks with specific high concentrations of commercial real estate (CRE) loans to tighten managerial controls. This paper shows that banks with concentrations in excess of the thresholds set in the guidance subsequently experienced slower growth in their CRE portfolios than can be explained by changes in bank or economic conditions. Moreover, banks above the CRE thresholds tended to have slower commercial and industrial loan growth but faster household loan growth following issuance of the guidance. The results highlight the potentially broad influence that portfolio-based macroprudential regulation might have on bank behavior.
Keywords: Credit channel, government regulation, bank lending, real estate
JEL Classification: E32, E44, G21, G28
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Inconsistent Regulators: Evidence from Banking
By Sumit Agarwal, David O. Lucca, ...
-
Changes in Bank Lending Standards and the Macroeconomy
By William F. Bassett, Mary Beth Chosak, ...
-
Changes in Bank Lending Standards and the Macroeconomy
By John C. Driscoll, Egon Zakrajsek, ...
-
The Effects of Bank Charter Switching on Supervisory Ratings
-
The Effects of Bank Charter Switching on Supervisory Ratings
-
How Do Joint Supervisors Examine Financial Institutions? The Case of State Banks
-
How Do Joint Supervisors Examine Financial Institutions? The Case of State Banks
-
How Do Joint Supervisors Examine Financial Institutions? The Case of State Banks
-
Do Bank Loans and Credit Standards Have an Effect on Output? A Panel Approach for the Euro Area
By Lorenzo Cappiello, Arjan Kadareja, ...
-
A Digital Age Communications Act Paradigm for Federal-State Relations
By Kyle Dixon and Phil Weiser